The 'Open-Source' Movement..

by Josh Grasmick

We begin today's article in honor of those free-thinkers who have made all our lives better, despite most of us not really knowing them or how they did it.  And we'll end today's article by learning how one tech entrepreneur just unleashed an orgy of innovation through the energy, car and computer industries…Reminding us what makes societies great..

It seems clear that the Founders believed people must take responsibility for themselves if they were to protect and maintain their God-given rights. They must increase man's power over nature, and as some might say, decrease man's power over man.

The more educated a nation's citizens, the less control a population needs (we'll be revisiting this theme next week when we discuss the future of education).

Yes, while human nature is a slow-moving evolution, the American Experiment overcame these limitations through its culture of liberated ideas. To borrow a colorful metaphor from Matt Ridley's The Rational Optimist, prevailing progress throughout U.S. history can be traced back to how "ideas have sex."

"Exchange is to cultural evolution as sex is to biological evolution," he says. Rather than genes, it is ideas that are exchanged between human minds that breed innovation and economic growth.

"Even allowing for the hundreds of millions who still live in abject poverty, disease and want, this generation of human beings has access to more calories, watts, lumen hours, square feet, gigabytes, megahertz, light-years, nanometers, bushels per acre, miles per gallon, food miles, air miles and, of course, dollars than any that went before. They have more Velcro, vaccines, vitamins, shoes, singers, soap operas, mango slicers, tennis rackets, guided missiles and anything else they could even imagine needing.

"Imagine if the man who invented the railway and the man who invented the locomotive could never meet or speak to each other, even through third parties. Paper and the printing press, the Internet and the mobile phone, coal and turbines, copper and tin, the wheel and steel, software and hardware."

This philosophy of tearing down barriers in order to allow ideas to breed… is what makes societies great and economies boom.  It's a credo that was also embodied in a computer revolution happening around the same time that Steve Jobs and Bill Gates were making a name for themselves. It has grown over time. Maybe you've heard of it? If not, don't worry. It's called…

The Open Source Movement

Back when computers were being built in the 1970s, the technology was so new that people would pass their software around to one another at creative gatherings such as the Homebrew Computer Club. And each person would tweak or hack the software a little bit, changing and usually improving it to meet their need.

It wasn't until the late 1970s or early 1980s that people started "closing" their software and forbidding others to look, change or even fix it. Bill Gates was one of the biggest proponents of proprietary software. In a famous open letter to hobbyists, he asked that anyone using Window's software to pay up.

But a loose confederation of hackers challenged Windows by collaborating on what's called "open source" software – something different than "proprietary" software. "Open source" extends to many different technologies… but is most famously represented by the operating system of Linux (the stock of which far exceeded investors' expectations when it went public). To make "open source" easier to understand, a lot of people use the play on words "copyleft" to describe it:

Copyleft: Making a creative work as freely available to be modified, and requiring all modified and extended versions of the creative work to be free as well.

Basically, the idea of "copyleft" was that not having intellectual property rights over software would actually encourage people to collaborate and change the technology based on how they want to use it. In a free market context, it could be considered a form of "hypercapitalism". And with each time it passed through peoples' hands, it was improved, modified and passed on again.  

The implications for the future cannot be overemphasized. The markets are in for an orgy of innovation that will disrupt the energy, automotive and computer industries.

An Orgy of Innovation Has Just Been Unleashed

"… there was a wall of Tesla patents in the lobby of our Palo Alto headquarters," said superstar Elon Musk yesterday. "That is no longer the case."

Josh's Note: I'm sure there are many out there who are questioning Tesla's wisdom of freeing all its electric-car patents. But just remember: While staple car companies like GM were lit on fire after the 2007-08 financial crisis, the mainstream was pooh-poohing the electric-car startup that was innovating into the headwinds of the financial storm.

"They have been removed, in the spirit of the open source movement, for the advancement of electric vehicle technology."

That's right. Musk just enlisted a militia of innovators to take and improve upon his electric vehicle patents. But there is a business tactic in here as well. Tesla Motors has established infrastructure to benefit from new demand from electric vehicle users. The company is getting into the big battery business, and it already has electric charging stations throughout the country. As Musk said recently while being interviewed about his $5 billion battery factory, "There will have to be hundreds of [similar] Gigafactories." Tesla is at the top of the food chain, and it's giving away free seeds to grow an ecosystem that it can ultimately feast upon.

It'll make you proud to be a Tesla owner and/or shareholder… or simply a more optimistic, temporary resident…

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